BBVA remedies in takeover bid are insufficient, Sabadell's CEO says

Chief Executive of Spain's Sabadell SAB Cesar Gonzalez-Bueno on Monday said that the remedies proposed by BBVA BBVA in its takeover offer were insufficient to address competition concerns.

On Friday, Sabadell moved to convince shareholders it should stay independent by raising its payout policy to 3.3 billion euros ($3.43 billion), as the Spanish bank tries to fend off a hostile takeover by its larger rival.

"The remedies that the BBVA is proposing are totally insufficient," Gonzalez-Bueno told Spanish broadcaster TVE.

The so-called remedies are the measures a company acquiring another agrees to take to ease the impact of a merger on the competitors, customers and suppliers.

Spain's government has opposed the takeover, which is undergoing a longer phase 2 antitrust review, while Sabadell has rejected BBVA's 12 billion euro full-share offer, saying it significantly undervalued the bank's growth potential.

On Monday, Gonzalez-Bueno said that he hoped that Spain's antitrust watchdog CNMC in phase 2 and then the government at a potential later stage "will truly defend the interests not only of the shareholders but of course of all the SMEs (small and mid-sized companies) in Spain."

The Spanish government cannot stop Sabadell shareholders from swapping their shares for those of BBVA, but it has the power to block a full merger.

Last month, BBVA Chairman Carlos Torres told a news conference he expected the deal to be approved in the coming weeks with "acceptable remedies" and that a full merger would take place, adding that he did not "contemplate any scenario with a veto from the government".

Among the remedies to address competition concerns, BBVA has promised not to close branches where there is no alternative nearby within a 300-metre (984-foot) radius and to maintain commercial terms for individuals and SMEs in areas where fewer than four financial institutions operate.